SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ending June 30, 1997
Commission File Number 0-21914
AGTsports, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 84-1165916
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(State of incorporation) (I.R.S. Employer ID
Number)
5031 S. Ulster Street, Suite 205, Denver, CO 80237
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(Address of principal executive offices) (zip code)
(303) 220-8686
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of Securities Exchange Act of 1934 during the
preceding 12 months (or for such a shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ]No [ ]
As of June 30, 1997, 29,812,687 common shares, $0.10 par value per share, were
outstanding.
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AGTsports, Inc.
INDEX
Part I FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets 3
June 30, 1997 and September 30, 1996
Consolidated Statements of Operations 4
Nine Months Ended June 30, 1997 and 1996
Consolidated Statements of Cash Flows 5
Nine Months Ended June 30, 1997 and 1996
Item 2. Management's Discussion and Analysis 6&7
Part II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Default on Senior Securities 8
Item 4. Submission of Matters to a Vote of Security
Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Part III SIGNATURES 9
Exhibit 27 10
2
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PART I.
ITEM 1. AGTsports, Inc.
(and Wholly Owned Subsidiaries)
CONSOLIDATED BALANCE SHEET
ASSETS
June 30, 1997 September 30, 1996
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(unaudited)
Current assets
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Cash and cash equivalents $ 38,505 $ 65,806
Accounts Receivable 29,170 -0-
Inventory 3,169 -0-
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Total current assets $ 70,844 $ 65,806
Fixed assets, net $ 78,517 $ 17,204
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Other Assets:
Prepaid Expenses $ 1,047 $ -0-
Patents 119,559 -0-
Other assets 4,100 4,100
Investment in joint venture -0- 119,350
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Total other assets $ 124,706 $ 123,450
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Total Assets $ 274,067 $ 206,460
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LIABILITIES and SHAREHOLDERS' DEFICIT
Current liabilities
Accounts payable $ 241,831 $ 268,977
Accrued expenses 392,558 718,352
Long term debt - current portion 459,846 1,373,846
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Total current liabilities 1,094,235 2,361,175
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Stockholders' deficit
Series A, preferred stock,
$4.00 par value;
50,000,000 shares authorized
No shares issued and outstanding
as of June 30, 1997 $ -0- $ -0-
Common Stock, $.001 par value;
50,000,000 shares authorized
29,812,687 shares issued and outstanding
as of June 30, 1997 and 23,930,596 issued
and outstanding as of September 30, 1996 $ 29,812 $ 23,931
Treasury Stock (16,720) (16,720)
Additional paid-in capital $ 22,839,033 20,915,460
Cumulative translation adjustment (16,823) (16,823)
Accumulated deficit (23,655,470) (23,060,563)
Total shareholders' equity (820,168) (2,154,715)
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Total liabilities and shareholders' equity $ 274,067 $ 206,460
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3
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AGTsports, Inc.
(and Wholly Owned Subsidiaries)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
June 30 June 30
1997 1996 1997 1996
---- ---- ---- ----
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Operating Revenues $ 18,296 $ 8 $ 36,335 $ 59,329
Expenses:
Salaries and Wages 37,432 88,161 125,130 381,563
Professional Services 75,070 161,896 120,005 1,080,901
General & Admin. Expenses 28,045 242,077 77,496 516,162
Depreciation 5,206 119,706 13,151 474,136
Research and Development 21,594 0 57,130 0
Travel and Entertainment 23,759 29,364 50,735 105,976
------------ ------------ ------------ ------------
Total Expenses $ 190,926 $ 641,204 $ 443,647 $ 2,558,738
Operating Income (Loss) (172,630) (641,196) (407,312) 2,558,738
Other Income (Expenses)
Interest (1,715) (25,516) (44,461) (70,385)
Other 0 2,666 0 4,881
------------ ------------ ------------ ------------
Total Other Income (Expenses) (1,715) (22,850) 44,461 (65,504)
Net Income (Loss) Before
Provision for Income Taxes (174,345) (664,046) (453,773) (2,564,913)
Extraordinary Items 0 0 0 5,150
------------ ------------ ------------ ------------
Net Income (Loss) (174,345) (664,046) (453,773) (2,564,913)
Income (Loss) per common share
Before Extraordinary Items (.01) (.03) (.02) (.15)
Extraordinary Items per Share 0 0 0 0
Net Income (Loss) Per Share (.01) (.03) (.02) (.15)
Weighted Average Shares
Of Common Stock Outstanding 29,812,687 20,444,672 29,812,687 17,524,907
4
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AGTsports, Inc.
(and Wholly Owned Subsidiaries)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
June 30,
1997 1996
---- ----
Cash flows from operating activities
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Net loss $ (453,773) $(2,559,763)
Adjustments to reconcile net loss to net cash
used in operations to net cash
provided by (used in) operating activities:
Depreciation and amortization 13,151 474,136
(Gain) Loss on Sale of Investments (119,350) -0-
Common Stock issued for Services -0- 769,857
Common Stock issued for Obligations 1,200,000 3,880,333
Forgiveness of Debt -0- (5,150)
(Increase) Decrease in Other Assets 254,341 73,633
Increase (Decrease) in Accounts Payable (39,195) (46,363)
Increase (Decrease) in Other Liabilities (1,200,000) (3,251,988)
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Net Cash Provided (Used) in
operating activities $ (344,826) $ (527,579)
Cash Flows from Investing Activities -0- (76,502)
Cash Flows from Financing Activities
Principal payments on long term debt (156,960) (8,000)
Proceeds from issuance of Capital Stock 474,485 759,875
Net cash provided by (used in)
financing activities 317,525 751,875
Net increase (decrease) in cash (27,301) 102,794
Cash at Beginning of the Year 65,806 16,904
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Cash at June 30 $ 38,505 $ 119,698
5
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AGTsports, Inc.
(and Wholly Owned Subsidiaries)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Management Representation
The accompanying unaudited interim financial statements have been prepared
in accordance with the instructions to Form 10-QSB and does not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for any interim
period are not necessarily indicative of results for the year. These statements
should be read in conjunction with the financial statements and related notes
included in the Company's Annual Report to shareholders on Form 10-KSB/A for the
year ended September 30, 1996.
ITEM 2: Management's Discussion and Analysis
In the fiscal quarter ending June 30, 1997, the Company was primarily
engaged in the restructuring of operations; the financial development of its
U.S. reservation tee times business and the "closing and absorbing" of two
acquisitions completed in January, 1997 and reported on the Company's Form 10-Q
dated March 31, 1997. AGT is positioning itself to become a national provider of
golf course software management systems. The Company also provides products and
consulting services to the golf industry. AGT is the "Official Technology
Partner" of the Ladies Professional Golf Association (LPGA) and is in the final
stages of developing a state of the art wireless scoring system which, when
completed, will become the Official LPGA Tournament Scoring System.
For the three month period ended June 30, 1997, the Company had limited
revenues and a net loss of ($174,345). The loss was attributed to costs
associated with the restructuring of the Company; absorbing two acquisitions and
non-recurring costs associated with acquisitions and growth. In the opinion of
management, the Company has improved significantly as compared to the same
period last year when it reported a net loss of ($664,046). During the quarter
ended June 30, 1997, the Company continued to strengthen its new management
team, divested itself of non-producing assets, and entered into negotiations
with third parties to reduce short term debt and to acquire additional golf
technology companies. The Company believes the planned acquisition of additional
golf technologies and related new business relationships will create a material
favorable impact on AGT operating cash flow and profitability on a going-forward
basis.
During the quarter ended June 30, 1997, the Company completed Version 2.0
of its TeeMaster 2000 golf tee times reservation system. The system incorporates
the powerful tools of previous versions into a state-of-the-art, Windows 95/NT,
multi-user application. Version 2.0 is comprised of several modules including a
network and internet-ready Electronic Tee Sheet, Caller ID, Voice Mail/Automated
Attendant, Tournament/Outing Scheduler, Customized Reports, and a Customizable
Lesson Scheduler. Tee Times of America, Inc., the Company's wholly owned
subsidiary, is headquartered in Dallas, Texas, and markets golf course
management software used to record tee times reservations for the golf industry.
The Company has its tee times reservation system installed at numerous courses
throughout the United States; including such notables as Arnold Palmer's
Presidio San Francisco, Hyatt's Bear Creek, U.S. Golf, ITT Sheraton and
Carolinas Golf Group.
6
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The Company is actively engaged in acquisition negotiations with other companies
including developers of golf course management software, as well as other golf
related businesses. It is the Company's plan to form a separate
subsidiary/division in the golf software industry as AGTsports expands it's
sports related activities.
During the quarter ended June 30, 1997, the Company returned 700,000 shares of
its issued and outstanding common stock to Treasury. The stock was returned to
the Company as a result of the mutual termination and recision of the former
1995 joint venture agreement with VET, Inc.
Another major accomplishment achieved by the Company during the current quarter
as reported in the Form 8-K dated August 5, 1997 was the successful conversion
of 6,850,000 voting, freetrading shares of the Company's issued and outstanding
common stock into 1,000,000 non-voting shares of the Company's issued and
outstanding preferred stock. The conversion was completed as a result of an
amendment to the joint venture agreement of September 15, 1995 with Global Links
Trading, Ltd., an international technology licensing company, and American
Consolidated Growth Corporation, a former affiliate of the Company. For all
intensive purposes, the amendment suspends the active role of the former
participants, terminates all non-U.S. marketing activities and transfers control
of all future decision making processes to Management of the Company.
In the opinion of Management, the transactions described above represent
important opportunities for the Company to improve asset value and to increase
shareholder value. During the quarter ended June 30, 1997, the Company has been
able to successfully continue operations, to improve its position in the
marketplace, to acquire outside consulting expertise and to strengthen its
marketing strategies. All of these efforts have been made for the purpose of
increasing shareholders' equity and profitability on a going forward basis. Such
efforts have included the resolution of numerous outstanding business matters
related to the former business of the Company, the reduction or elimination of
significant portions of short term debt and the adoption of new measures
designed to increase working capital and revenues.
Liquidity and Capital Resources
Cash and cash equivalent's balance on June 30, 1997 was $67,675.
In the opinion of management, provided new sources of working capital can
be secured, the Company will be able to successfully meet all of its current
obligations. However, no assurances can be given the Company will be successful
in these endeavors.
PART II.
ITEM 1. Legal Proceedings
During the quarter ended June 30, 1997, the Company was not a party to, nor
aware of, any legal proceedings involving the Company that, in the opinion of
Management, were material to the future of the Company.
7
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ITEM 2. Changes in Securities
During the Quarter ended June 30, 1997, the Company issued 994,515 shares
of its restricted common stock for debt reduction, acquisitions, and general
working capital. The Company also cancelled 700,000 shares of its common stock
pursuant to the termination and recision of the former 1995 joint venture
agreement with VET, Inc. through mutual consent of the parties.
ITEM 3. Default on Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Security Holders during this
reporting period.
ITEM 5. Changes in Securities
As of June 30, 1997, the Company had no other reportable events which were
not previously disclosed in the below referenced exhibits and reports.
ITEM 6. Exhibits and Reports on Form 8-k
None.
8
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on this 13th day of August,
1997.
Dated: August 13, 1997
By: /s/ B. Mack DeVine
---------------------------------
B. Mack DeVine
Chief Executive Officer
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, this report has been signed by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
Dated: August 13, 1997
By: /s/ Gary W. Crews
---------------------------------
Gary W. Crews
President
Dated: August 13, 1997
By: /s/ Cory J. Coppage
---------------------------------
Cory J. Coppage
Secretary and Treasurer
9
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<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from balance sheet and
statement of operations accounts filed as for 10-QSB and is qualified in its
entirety by such registrant's annual report on 10-KSB for the year end period
September 30, 1996.
</LEGEND>
<S> <C>
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<PERIOD-END> JUN-30-1997
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<PP&E> 83,543
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<COMMON> 29,518
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<SALES> 18,039
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